The Federal Government has announced a major mining investment deal projected to inject $1.3 billion into Nigeria’s solid minerals sector, and is expected to contribute up to $25 billion to the Nigeria’s GDP.
Dele Alake, the minister of Solid Minerals Development, in his keynote speech at the BusinessDay mining conference on Thursday in Abuja, while noting a growing interest in Nigeria’s mineral sector, said the landmark investment led by the African Finance Corporation (AFC) and the Solid Minerals Development Fund will Nigeria’s most significant mining private sector project and direct investment.
“There is the initial study by the African Finance Corporation and the Solid Minerals Development Fund. And they have confirmed the competitiveness and the viability of their investmet which is quite big. They are going to establish a critical minerals mainstream facility in Nigeria, and at an indicative capital expenditure of about $1.3 billion, this will be Nigeria’s most significant mining private sector project and direct investment”, he said.
“This project will contribute $1.2 billion of economic output of the Gross Domestic Product of Nigeria, and it will contribute about $1.2 billion of economic output annually, and over $25 billion contributions during the project life cycle. And of course, $8 billion in foreign exchange ideas. This investment is an endorsement of our ministry’s ongoing reforms and the SNDF and the AFC goals of capitalizing private sector-led investments in the soil and minerals sector”, he further informed.
Alake said the planned NMC which will be 50% owned by private sector and 25% by government will drive the establishment of joint ventures which the minister believes will be instrumental in driving investment.
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“Actually, it’s no longer proposed, it is in existence right now, because we have the CEO and the company secretary. It has a structure , as we speak. In a very short period of time, it’s going to roll out. So if a private sector is owning 50% of that company, you can rest assured that the private sector culture of management will be injected into that company and it will endure.
“So, in essence, this is designed to limit the influence of government in the running of this Nigerian mineral company, and that is going to be a legacy that we are leaving behind”, Alake added.
He expressed concern over Nigeria’s historically low investment in the solid minerals sector, highlighting the disparity between Nigeria and smaller African nations in terms of exploration funding.
“For decade, we ignored this very vital sector of the economy”, he noted. Alake said despite the sector’s immense potential, countries like Senegal, considerably smaller in both size and economyvhave outspent Nigeria by more than tenfold on mineral exploration.
Citing recent data, he revealed that at the time the current administration assumed office, Nigeria had allocated just $2 million for exploration activities. In contrast, Côte d’Ivoire had invested $148 million, Senegal approximately $48 million, and Sierra Leone over $14 million.
“Not to mention mining economies such as the Democratic Republic of Congo and Zimbabwe. Nigeria’s spending ranked the lowest, a reflection of decades of neglect and underinvestment in this critical sector”, he stressed.
Alake attributed this oversight to Nigeria’s long-term dependency on oil revenues, stating that for several decades, the country benefited from the free flow of petro-dollars, noting that Nigeria ought br the largest economy.
“So we shut our eyes to the constructive sectors of the economy, the regenerative sectors of the economy like agriculture, sewing, manufacturing. And we went into a consumption spree, because the dollar was coming in. And we were importing everything, including toothpicks and orange juice”, he said.
He, however commended President Bola Tinubu for recognising the sector’s importance and approving a significantly enhanced budget for solid minerals, which he said would help reposition Nigeria to fully harness its vast mineral wealth.
